Customization: Ideal Varieties, Product Uniqueness and Price Competition
We study customization in the Hotelling model with two firms. In addition to providing ideal varieties, the perceived uniqueness of a customized product contributes independently to consumer utility. We show that only when consumer preferences for uniqueness are high customization occurs in equilibrium.
|Date of creation:||31 Jan 2009|
|Date of revision:|
|Publication status:||published in Economics Bulletin 2009|
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- Alexei Alexandrov, 2006.
1435, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Niladri B. Syam & Nanda Kumar, 2006. "On Customized Goods, Standard Goods, and Competition," Marketing Science, INFORMS, vol. 25(5), pages 525-537, September.
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- Oksana Loginova & X. H. Wang, 2009.
"Customization with Vertically Differentiated Products,"
0903, Department of Economics, University of Missouri.
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- Nan Xia & S. Rajagopalan, 2009. "Standard vs. Custom Products: Variety, Lead Time, and Price Competition," Marketing Science, INFORMS, vol. 28(5), pages 887-900, 09-10.
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